Southeast Asia’s digital economy forecast to reach $368 billion in 2026

Southeast Asia’s digital economy is projected to generate $368 billion in gross merchandise value in 2026, a 17% annual increase. Google, Temasek and Bain released the forecast in their latest regional study, which identifies AI adoption as a growth driver.

The study estimates that 243 million people across the region actively use generative AI. E-commerce accounts for a projected $226 billion in transaction value this year, while online travel contributes $59 billion. Google said AI tools are helping shoppers evaluate purchases and travelers organize trips.

The headline measure tracks activity across digital platforms rather than their contribution to gross domestic product. The study projects that the regional digital economy will exceed $1 trillion by 2035, extending growth across shopping, travel and other online services.

Supporting that expansion will require additional computing infrastructure and more efficient energy use. The study estimates that data center capacity must roughly triple over five years to accommodate its projected rise in AI demand.